Verisk Analytics, Inc. Q4 FY2025 earnings call

Lee M. Shavel mentioned Verisk delivered solid 2025 financial results in line with年初 guidance despite temporary headwinds. Ended 2025 with two portfolio actions: terminating the AccuLinks acquisition and selling Verisk Marketing Solutions. 2026 sees a healthy insurance industry, and Steve Cotterer joined to lead claims business. In constant dialogue with clients on strategic and technological issues, especially AI strategies. In claims estimating, launched Exact Expert, Exact AI, and ExactGen, leveraging data, industry process, connectivity, etc. Elizabeth D. Mann detailed financials including organic constant currency results, subscription and transactional revenues, adjusted EBITDA, and discussed 2026 guidance.

Verisk Analytics, Inc. delivered organic constant currency revenue growth of 6.6% and organic constant currency adjusted EBITDA growth of 8.5% in 2025 with strong free cash flow growth. In the fourth quarter, GAAP revenue was $779,000,000, up 5.9% year-over-year; net income was $197,000,000, down 6.2% year-over-year; diluted GAAP EPS was $1.42, down 1% year-over-year. For the full year 2025, organic constant currency revenue grew 6.6%. Subscription revenues, making up 84% of total revenues in the quarter, grew 7.7% on an organic constant currency basis. Transactional revenues, making up 16% of total revenues, declined 6.5% on an organic constant currency basis in the fourth quarter, primarily due to lower volume in Property Estimating Solutions business and softness in personal lines auto business. Adjusted EBITDA for the full year 2025 grew 8.5% with adjusted EBITDA margins of 56.2%, up 150 basis points year over year.

Verisk expects consolidated revenue for 2026 to be in the range of $3,190,000,000 to $3,240,000,000; adjusted EBITDA in the range of $1,790,000,000 to $1,830,000,000; adjusted EBITDA margin in the range of 56% to 56.5%; interest expense between $190,000,000 and $200,000,000; capital expenditure within the range of $260,000,000 to $280,000,000; tax rate in the range of 23% to 26%; adjusted earnings per share in the range of $7.45 to $7.75. Anticipates first quarter 2026 reported revenue will be lower than 2025 due to divestiture of Verisk Marketing Solutions and other factors, with first quarter expected to be the trough.

Q: Toni Michele Kaplan asked when talking to clients, would they prefer to use Verisk's data to create AI products themselves or have Verisk create them, and if they can use Verisk's data as an input into third-party AI products.

A: Lee M. Shavel said it depends on client nature. Largest clients want alignment on data for AI, smaller clients are more interested in using Verisk's existing AI products applied to processes.

Q: Manav Shiv Patnaik asked how much of the software and analytics sold come tied with the data and how contract structures might change.

A: Lee M. Shavel said software in Verisk's context is inherently a data delivery device and connectivity element integral to core process.

Q: Faiza Alwy asked if expecting better ability to take pricing for value provided and differentiation in customer type and impact on margins.

A: Lee M. Shavel said all businesses are value-driven, AI investment can drive incremental revenues and has inherent operating leverage beneficial to margins.

Q: Andrew Owen Nicholas asked about transactional growth decline and path to recovery.

A: Elizabeth D. Mann said primary contributor is prior year storm comparison, but transactional revenue has three-year positive CAGR and expects to work through tough comps.

Q: George Tong asked about 2026 EBITDA margins and balancing investments with cost efficiencies.

A: Elizabeth D. Mann said 2025 normalized margin 55.8%, 2026 guidance shows modest margin expansion balancing efficiencies and AI investment.

Q: Wenting Zhu asked about broader selling environment and sales cycle as P&C insurance transitions.

A: Lee M. Shavel said seeing improving sales cycle with carriers having motivation and resources to explore data and analytics.

Q: Gregory Peters asked about annual price increases in OCC and feedback from customers.

A: Lee M. Shavel said clients recognize value of investments, leading to strong renewals and positive pricing environment.

Q: Scott Wurtzel asked about competitive dynamics on auto personal line side and actions taken.

A: Lee M. Shavel had Robert Newbold share about challenges and focus on differentiated analytics.

Q: Jason Daniel Haas asked about margin commentary and long-term margin trajectory.

A: Elizabeth D. Mann said exhibiting operating leverage for margin expansion.

Q: David Paige asked about percentage of revenues from contributory data sources and AI moats.

A: Elizabeth D. Mann and Lee M. Shavel said most business has defensibility with strong data ingredients and AI not threatening fundamental differentiation, will discuss more at Investor Day.